Global Automakers Racing Laps Around Startup Technology

BMW, Land Rover, Ford, Porsche. Startups working in electrification, mobility and connected car technologies are gaining traction with the big auto players

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From devising driver monitoring systems to mapping services and driver safety data on the go, startups are rapidly emerging in every technological vertical in the automotive space. Over 1,700 startups are focusing on developing technologies that enable electrification, autonomous cars, and mobility solutions to reduce the cost of ownership and enhance user experience. Meanwhile there are a number of original equipment manufacturers (OEM) coming up with initiatives such as BMW Startup Garage, JLR Incubator, and GM Ventures, racing to bring autonomous electric mobility to market through their vested interests in startups.

Frost and Sullivan's latest analysis, ‘Startups Disrupting the Global Automotive and Mobility Industry, 2016-2017’, finds the total startup funding across various technological verticals garnered 1.55 billion dollars in 2016, with major investment focused on mobility, electrification and connected car technologies.

"By 2025, mobility solution revenue is expected to reach 1.89 trillion euros, and OEMs will look to capitalize on this by acquiring or investing in mobility startups across the globe," said Frost and Sullivan mobility industry analyst, Ramnath Eswaravadivoo. "Tier 1 suppliers are also engaging in acquisitions and investments in startups in order to enhance their existing portfolio, gain a competitive edge, and become a one-stop solution provider as evinced by  acquisition of , acquisition of , and  investment in aftermarket head-up display provider ."

Developments and trends driving automotive and mobility startup have been many. Here are a few poignant ones: Bosch focusing on developing startups in India and investing close to 1.2 billion euros in Internet of Things technology in this region; Europe expanding fixed long-distance ridesharing - more than 50 major ridesharing companies operate in the region as major cities are easily accessible with a sizeable population of frequent travelers. Then there is the burgeoning mobility tech startups in Israel; from 50 a few years ago, startups that focus on smart mobility, cyber security, and electric mobility have crossed 300.

Much of the funding meant for mobility tech startups will be for projects related to the electric vehicle battery and charger segments, establishing stronger distribution and channel enablers for service aggregators, and robust retail channels for telematics and in-vehicle technologies. Artificial intelligence in self-learning cars to grow exponentially with increasing data; by 2025, such cars will have a fully autonomous driving mode and be capable of assisting users.

"In the future, all OEMs will look toward digitalization of their ecosystem; Increasing digital retail and adoption of blockchain technologies will be critical success factors," noted Eswaravadivoo.

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